> From: Tony Weeg [mailto:[EMAIL PROTECTED] > no i dont think so. > in fact, i equate these kinds of loans to payday check loan places... > just doesnt add up, if you can afford to throw down at least > some downpayment on the house, and get a 30 year standard > loan. they make the most sense, and are a lot more secure as > the INT, is set for 30 years. > > jayme and i got a 30 yr 100% loan, only had to drop 4k on the > day of settlement, took the other 17k we saved and bought > stuff for the house. it ended up being a VERY nice, easy > 1500/month mortgage, right now, about 12k a year in INT, and > the houses in our neighborhood are selling for almost 100k > more than we bought ours for 2 years ago, jan. > 3. so not only do we have a very standard loan, with no > quirks, but the equity is slowly getting chipped away, > through larger than expected monthly payments, and we still > can take the 12k of interest payments off our taxes in a few weeks ! > > we do have a 1 point PMI, but that can be erased in a year or > so, if we want to refinance and pay some closing costs etc... > but thats to be determined.
Tony, Don't be so quick to judge. The interest only (IO) is an OPTION not a type of loan. I should have worded my post more clearly. If you get a mortgage with an IO option and make the interest+principal payment, that is the same as a mortgage without the option. The things to consider are these: Appreciation of house. In montgomery county, the home prices went up 70% in the last 5 years!!! That is crazy. It is almost a gimme that your home will appreciate over 5 or 10 years to make it worth the IO loan. Investing. If you take the difference between the mortgage with the IO option and without and invest the difference, the long term gains could be huge... Even going with low risk investment options. Personally, I would make sure I maxed out my IRA, 401K, my fiance's 403B and had all debt paid off. Duration at home. We are not sure we want to stay so close to DC in the long run. We decided for the enxt 5 years or so we would like to stay in the same area which also happens to be a hot spot for housing... Everyone wants it and most are willing to pay top dollar for it. We happen to be in a unique situation where we would be buying from someone we know and saving a lot of money on realtor, etc. IO options are not quirks in my opinion. It is just another thing to consider in order to maximize the situation. Also remember that the entire payment you make is tax deductable, which will also help. Since we are not considering staying there long term, we won't be buying any points as we will not recoup the cost with such a short (relative to the mortgage) duration in the home. Mike ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Find out how CFTicket can increase your company's customer support efficiency by 100% http://www.houseoffusion.com/banners/view.cfm?bannerid=49 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:143739 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
